Archive for the ‘Innovation’ Category

Made in Canada: Sustaining a Global Competitive Advantage in Cannabis Technology

Last month marked the one year anniversary since Canada became the first G7 country to legalize cannabis. On October 17, 2019, the Canadian Cannabis Regulations were updated to establish rules for the legal production and sale of three new classes of cannabis including edibles, extracts, and topicals, which are expected to become available for purchase in physical and online stores beginning in mid-December 2019.

With Canada currently representing the second-largest legal cannabis market in the world, innovation is now more vital than ever to maintaining a sustainable competitive Canadian advantage in the global cannabis value chain.

While legalization has attracted unprecedented levels of investment and has paved the way for accelerated research, clinical Cannabis research remains in its infancy with limited and often conflicting open-source information requiring heavy R&D investments to distinguish companies in this oversaturated market. Additionally, with the expansion of the market in terms of volumes and formats, much research is needed in harvesting/ processing technologies and product development.

Fortunately, costs of innovation in the cannabis industry can be offset with non-dilutive funding which can critically extend a company’s runway, bridge the funding gap to commercialization, and reduce the risk for investors.

Funding Cannabis R&D in Canada

The SR&ED tax credit program is the most lucrative source of non-dilutive funding for companies performing R&D in Canada, providing up to 68% back on eligible R&D expenditures for Qualified Canadian Controlled Private Corporations (CCPC’s) and 43% for Foreign-owned or public corporations depending on the province.

Examples of SR&ED in Cannabis include:

1. Edibles, Beverages, Extracts, and Topicals

  • Enhancing nutrient content or eliminating allergens.
  • Increasing product quality, yield, or shelf-life.
  • Overcoming ingredient interference (i.e. chocolate) with potency testing.
  • Maintaining formulaic stability, solubility, and dispersion
  • Developing terpene-based organoleptic profiles.
  • Scaling up and improving process efficiency.
  • Overcoming limitations of processes that utilize reagents (ethanol, CO2, propane).
  • Improving/developing extraction sequences and process parameters, and new isolation methods.
  • Reducing water consumption, or improving heating/cooling processes.
  • Developing innovative sustainable cannabis packaging solutions.

2. Medicinal & Pharmaceutical

  • Developing novel cannabis treatments and medical procedures.
  • Clinically assessing patient response to different doses, strains, and cultivation practices. 
  • Developing new, innovative methods to assess cannabinoid concentration.
  • Developing methods to test medicinal ingredient accuracy for consumers and industry professionals.

3. Cultivation/Harvesting

  • Testing the effects of climate/growing conditions (temperature and humidity, mineral composition of soil ph., and light exposure) and relative cultivation sequences on yield/ potency and the resulting product quality (yield, potency, terpenes profile).
  • Assessing growth conditions relative to processing parameters and product efficacy.
  • Developing new bio-stimulants for disease resistance, new fertilizer blends for boosting yield or developing biological pest controls.
  • Performing gene editing and breeding studies.
  • Integrating automation processes and equipment.  

4. ICT

  • Improving diagnostic and data analytics.
  • Developing cloud biology platforms and software applications.
  • Developing Smart Farming, IoT, and security systems.  

Bridging the Funding Gap

SR&ED funding can be combined with other sources of non-dilutive financing at various stages of growth to bridge the funding gap from product development to commercialization. 

Advanced SR&ED Financing: While the SR&ED tax credit program is critical for the viability of Canadian companies, it often takes over one year to receive the funding, which can be challenging, particularly for early stage companies. Advanced SR&ED accrual debt financing helps to bridge the financing gap by enabling companies to gain access to up to 80% of their SR&ED refund as soon as six months pre-filing.

Agri and Regional R&D funding: The Canadian Agricultural Partnership (CAP) is a five-year, $3 billion, federal-provincial-territorial agreement, that will replace Growing Forward 2 (GF2), and provides cost-sharing funding for processors and other agri-related businesses. The FedDev Rural Innovation Initiative (RII) regional stream is a non-repayable grant for SMEs operating in rural Southern Ontario within priority sectors that covers up to 50% of eligible project costs for a maximum of $100,000.

Commercialization: The Industrial Research Assistance Program (IRAP) supports companies that are investing in new technology projects that lead to new products, processes, or services in Canada, with an emphasis on commercialization. IRAP will cover labour and subcontractor costs. IRAP can be paired with SR&ED to increase the total funding amounts, provided adequate deductions for overlap are made.

Export: CanExport is a government funding program that provides funding to Canadian small and medium-sized enterprises (SMEs) to support new export market development. Previously, the CanExport program excluded the agriculture and food processing sectors, since companies in these industries were already eligible for export funding through the AgriMarketing program. However, as of August 22, 2019, the program will also be expanded to include supporting companies from Canada’s agriculture, agri-food and agri-products industry, including fish and seafood. CanExport’s funding limit for SMEs will also increase to $75,000 to cover up to 75% of eligible expenses.

Having a first mover advantage with federal legalization, Canada is poised to lead the world in cannabis R&D and evidence-based cannabis policy; however, this will require continued investment in R&D and the commercialization of ‘Made in Canada’ innovations in cannabis.  

Contact us today for a free assessment of your funding eligibility

Capitalizing on the Growing Demand for Alternative Proteins

Alternative proteins are proving evermore propitious in the AgriTech and FoodTech sectors of Canadian industry as traditional meats lose favorability under the rising tensions brought on by climate change, population increase, and greater demand for healthy and sustainable living.

Meat poses a unique challenge to the future given the environmental limitations of land and water required to support livestock capable of feeding a global population approaching 10 billion, at which point the current North American dietary standard will no longer meet sustainable development goals. With inordinate greenhouse gas emissions and health concerns connected to excess meat consumption also to consider, there has been burgeoning investment to develop alternative plant-based proteins in Canada.

Despite substantial scientific progress in this area over the last decade, ever-increasing demand for plant-based food and beverages and meat-alternative solutions continuously strains the ability of Canadian companies to stay competitive. It is thus critical that a business leverage all possible avenues of funding to maximize their innovative potential and development capabilities when pursuing advancement in alternative protein technologies.

Innovation, Science and Technology

From the release of Canada’s 2019 dietary guideline promoting plant-based proteins to consumer interest in plant-based foods and beverages rising by 25% in Q1, there is real incentive to boost R&D efforts in areas such as clean meats, meat-alternative technologies, and non-dairy milk formulations. The work being done to formulate new plant-based products and design advanced manufacturing processes are key examples of where a company’s everyday business objectives can translate into funding opportunities.

Attempts to deliver simulated meat products to market using only plant ingredients while achieving comparable qualities in texture and taste to that of real meats should not go unrewarded. Methods, such as high-moisture extrusion (HME), to adjust substrate properties like fiber structure and density, whether through recipe design or alterations in temperatures and pressures, are riddled with uncertainty, and can thus often qualify for funding support.

Presenting itself as an even newer technique than HME is shear-cell technology, which claims to have a smaller carbon footprint while yielding higher quality analogues more closely resembling real meats. With synthetic meat products derived from this form of processing soon to reach our shelves, there are future funding guarantees as innovation works to keep up with excited consumer demand.

Development of brown algae and kelp culture techniques, such as the artificial induction of sporogenesis or gametophyte culturing in vitro, are other exemplary applications within the plant-based protein field where novelty is being wholly encouraged through a myriad of funding options.

Lab-based methods of developing self-reproducing animal cells of various proeins, strategized to reduce land and water utilization, and improving stem cell extraction and growth capabilities are other areas where experimentation presents a ripe opportunity for funding given the potential these areas have for improving meat consumption sustainability. Similarly, the engineering of methane-based proteins is another clear case of where innovation has the potential to accrue substantial backing in funds.

Additionally, innovation in the field of cellular agriculture serves to address food security and environmental concerns by providing a means of replacing traditional livestock with technologies capable of growing meat from living or once-living cells in the form of its own cell culture media. Acellular agriculture, too, is an area proving highly innovative as new and improved methodologies are being devised to efficiently grow and harvest products from cell cultures to produce alternative proteins and agricultural items such as milk and egg whites.

Insects are also becoming a growing trend for meat alternatives as manufacturers have started using crickets and mealworms raised at scale to make protein-rich flour. Not only does raising crickets produce 100x less greenhouse gas emissions relative to cattle production, but crickets also have a higher concentration of protein than either beef or chicken. Hence, any endeavors to create insect-based products with desirable organoleptic qualities will likely make a business a prime candidate for funding.       

Non-Dilutive Funding Options to Support AgriTech Innovation

When dealing in AgriTech innovation, Canadian companies have a variety of non-dilutive funding options, such as tax credits, SR&ED financing and grants/programs, to support project development across stages of growth from R&D to commercialization and export.

SR&ED Tax Credits and Financing: The Scientific Research and Experimental Development (SR&ED) program provides one of the most lucrative sources of non-dilutive funding to Canadian companies, with an average of over $3 billion in funds allocated each year. However, one of the main challenges with the SR&ED program is that it can often take up to a year to receive the refund. Companies can gain advanced access for up to 80% of their estimated refund through SR&ED accrual debt financing to accelerate the rate of funding when there are cash flow issues or government returns are delayed. This is particularly beneficial for early-stage companies as it allows them to obtain an advance on funding up to six months before filing to bridge the funding gap.

Grants/Programs: There are numerous grants and programs offered like the Canadian Agricultural Partnership (CAP), the FedDev Rural Innovation Initiative (RII), and the Climate Action Incentive Fund (CAIF) SME Project Stream. Take the CAIF for example, which focuses on SMEs operating in building, transportation, industry, waste, and agriculture sectors within Saskatchewan, Manitoba, Ontario or New Brunswick; if eligible, a company can receive a rebate covering up to 25% of project costs for a maximum of $250,000 to support reducing energy usage, costs and greenhouse gas emissions. The application intake period is open until October 15, 2019, or until funding is exhausted. The Industrial Research Assistance Program (IRAP) and CanExport are other funding sources to help with commercialization and export, which can then be combined with SR&ED tax credits to maximize funding potential. With $950 million in funding awarded to five high tech superclusters, including Protein Industries Canada, yet another means of funding an AgriTech business is available. Focusing on enabling agri-food technologies, Protein Industries Canada investment will be matched 50:50 by the private sector with the aim of making Canada a leading source for plant proteins.

Learn more about the specific details of each of these non-dilutive funding options here.

Canada’s strong appetite for change is a funding dream for those dishing out the next round of alternative protein solutions. To learn more about funding your AgriTech business, please contact us for a free consultation.


Authored by Philip Finkelstein, Technical Writer at NorthBridge Consultants.

New FedDev Funding For Rural Innovation Projects

SMEs operating in rural Southern Ontario within priority sectors such as advanced manufacturing, clean technology, digital industries, and food processing and Agtech may be eligible to receive a non-repayable grant to cover up to 50% of eligible project costs for a maximum of $100,000 through the FedDev Rural Innovation Initiative (RII) Regional stream. 

FedDev is dedicating $100M, over the next three years, to spur investment in rural southern Ontario. The recently launched Rural Innovation Initiative (RII) Regional Stream aims to invest in local projects that support high-potential enterprises and the transition of traditional rural sectors and business to the new rural economy.

Supported projects will strengthen competitiveness, productivity, business growth, process innovation, new market access, creation and retention of employment opportunities, the re-skilling of the industrial workforce, incremental sales and increased profitability.

Priority will be given to projects that advance the economic participation of youth, women, Indigenous peoples, persons with disabilities, newcomers, and visible minorities.

Applications will be accepted on an ongoing basis starting on May 21, 2019, with project activities to be completed by December 31, 2020.

Eligible Costs may include:

  • Labour
  • Expertise
  • Non-Capital
  • Capital

Eligible Activities may include:

  • New materials
  • Cutting edge services software
  • Integrated solutions
  • Cloud computing
  • Rapid prototyping and engineering
  • Robotics and automation
  • Machine learning
  • Extended intelligence, etc.

Is your company looking for funding to support innovation and business growth initiatives? Contact us today to discuss your projects and find out how much funding your company could receive.

New FedDev Funding Announced- Business Scale-up and Productivity Stream

If your company is a Canadian or provincially incorporated businesses located in southern Ontario you may be eligible to receive a repayable grant to cover up to 35% of eligible project costs for a maximum of $10 million per project through the FedDev Stream 1: Business Scale-up and Productivity Stream.

The recently announced Business Scale-up and Productivity Stream aims to accelerate the growth of firms and assist with the adoption and adaptation of new, innovative technologies that support scale-up, productivity, development of and entry into new markets to help companies become globally competitive.

Applications will be accepted on an ongoing basis with no submission deadlines.

Eligible costs include:

  • Labor
  • Expertise
  • Non-Capital
  • Capital

Eligible applicants must demonstrate:

  • A minimum of 65% funding available for the project.
  • A sustainable business model
  • Financial, managerial, technical, and operational capacity
  • Minimum of 5 full time employees.
  • Market/industry demand
  • Potential for market growth
  • A viable project plan

Preference will be given to projects focused on issues and opportunities identified by FedDev Ontario as priority sectors, or projects that reinforce Ontario’s competitive advantage.

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Elevate TechFest Sets the Stage for Canadian AI – Powered Medicine

For the second year in a row, Elevate TechFest, Canada’s largest technology and innovation festival, took over downtown Toronto in September as over 10,000 members of the tech community, including investors, government, media, start-ups, talent and next generation innovators all gathered to “disrupt together, celebrate diversity and inclusiveness, and proudly showcase the best of Canadian innovation.”

As a community driven festival, Elevate provides a shared stage for Canada’s booming high tech startup ecosystem to showcase their work, and to learn and network through numerous events, educational presentations, award ceremonies, and social gatherings. The result is an exceptionally inclusive and collaborative entrepreneurial platform which highlights Canada’s greatest competitive advantage to attract talent and investment for the next generation of innovation.

This is particularly relevant in the fields of AI and health/medical technology, with Canada being uniquely poised to drive AI innovation in the healthcare field as a global leader in AI technology with its universal healthcare system. Canada’s strength in AI and medical technology was emphasized throughout the various Elevate events and tracks by the prevalence of growing companies developing machine learning and digital health solutions with the goal of democratizing AI powered medicine.

Industry leaders such as Al Gore, Eric Schmidt, Tobias Lutke, Minister Navdeep Bains, Whitney Wolfe Herd and Wyclef Jean, shared the main stage on September 25 to discuss the role of technology and collaboration in shaping the future.

Keynote: How Technology Drives Global Change with Al Gore

Keynote: How Technology Drives Global Change with Al Gore

In a fireside chat moderated by co-founder and CEO of Canada Learning Code, Melissa Sariffodeen, Innovation Minister Navdeep Bains discussed the federal Economic Strategy Table interim report and ‘How Canada Wins’ with Tobias Lutke, Shopify CEO and the Chair of the Digital Industries group (that is advising the government on improving the digital economy). The Economic Strategy Tables are a new model for industry-government collaboration that were announced as part of the Government of Canada’s Innovation and Skills Plan to support economic growth in six key sectors: advanced manufacturing, agri-food, clean technology, digital industries, health/bio-sciences and resources of the future. According to Lutke, Canada needs more “anchor” or “freight train” companies which have “an outsized impact on the ecosystem.”

Top Canadian AI startups were invited to pitch their ideas for a chance to win $1,000,000 and the attention of international media, investors and global tech leaders at the ElevateR pitch competition taking place as part of the Main Stage events. Finalists Elucid labs and Aifred Health pitched live before Al Gore’s keynote address. Elucid Labs, a Waterloo based company that is developing a non-invasive digital biopsy device for detecting and diagnosing dermatological disease, was named the people’s choice winner. Aifred Health, the runner-up in the competition, is a Montreal based company using machine learning to increase treatment efficacy in mental health by creating a deep-learning based clinical decision tool for physicians to bring personalized medicine to psychiatry.

ElevateR 7

2018 ElevateR Pitch Competition – AI Edition

During the event, Toronto based Daisy Intelligence, an AI software-as-a-service company targeting the retail and insurance industries, announced that they had secured a $5M investment from Espresso Capital. Daisy Intelligence CEO, Gary Saarenvirta, acknowledged government funding programs such as SR&ED in supporting the company.

Aifred’s CEO, David Benrimoh spoke about ‘A new hope for personalized Mental Health’ as part of the Elevate Educate Health track on September 26, which provided a platform for discussions emphasizing the growth and impact of technology solutions in mental health. The track featured keynote discussions on topics such as ‘Democratizing access to mental health using technology’ by Sam Duboc, Chair and CEO of Beacon, and ‘Chat Bot solution for mental health’ by Lexi Kaplin and Alexandra Reeves of Conversation Health.

Using innovation for better access to mental healthcare with Alisa Simon, Hemai Parthasarathy, Sam Duboc, and Sean Kidd.

Adjoining the Health track at Elevate Educate, the Cannabis track featured keynote speakers from federal, academic and industry policy experts, thereby providing a shared stage for an open dialogue for patients, growers, innovators, and healthcare providers on pain management, cannabis legislature, and technology solutions.

Opioid Crisis and the Cannabis Opportunity with Kelly Narine of Aurora, Ed Sellers of the University of Toronto, Dr. Bernard Le Foll, Dr. Michel Verbora from Aleafia and moderator Ying Tam Managing Director, Health Ventures at MaRS

The strength of Canadian Medtech companies was particularly emphasized at the Elevate Educate AI track by several growing startups that are pushing the boundaries of AI powered medical technology. Various companies attended, such as Phenomic AI, which is developing deep learning solutions to automate and accelerate drug discovery; BenchSci, a reagent intelligence platform; Swift Medical, which is developing  the world’s most advanced and comprehensive wound care management software; tealbook, a platform providing centralized supplier  knowledge and discovery, and Cloud DX, a medically accurate, consumer/clinical vital sign platform.

AI Spotlight: Automating Drug Discovery with Oren Kraus of Phenomic AI

AI Spotlight: Automating Drug Discovery with Oren Kraus of Phenomic AI

 

AI Spotlight: How AI Will Transform B2B with Stephany Lapierre of tealbook

AI Spotlight: How AI Will Transform B2B  with Stephany Lapierre of tealbook

The rapid growth of AI and  availability of data in the age of information also raised important ethical discussions on the Elevate AI stage in regards to ownership, trust, use of information, data breaches, questionable data practices, and privacy debates. And there could not be a better time or place for these discussions to occur than in the country that has produced some of the most well known experts in AI, such as deep Learning pioneers Geoffrey Hinton and Joshua Bengio. When discussing the role of Canada in the AI revolution at the 2017 Elevate AI track, Bengio noted that “we had the foresight to invest in something risky…and we built something in terms of critical mass.” As a global leader in disruptive technologies such as Artificial Intelligence, FinTech and Blockchain, which will radically transform how we live, work and interact, Canada is emerging as a lucrative and inclusive epicenter of the advanced technology revolution which is drawing global talent, ideas, and investment. In particular, the startup community in the Waterloo-Toronto tech Corridor has exploded over the past few years, especially in areas such as AI and Medtech, thereby attracting private and public investment. Speaking at the 2018 Elevate TechFest,  Layer 6 AI co-founder and chief AI office for TD Bank, noted that “We are at a unique moment time when this industry around artificial intelligence is first starting to grow and we need to jump on this opportunity… we have an opportunity to transform the world.”

The New Normal? Institutionalizing Ethics in the Age of Algorithm with Hessie Jones, Carolina Bessega,  Ann Cavoukian,and Carol Piovesan,

The New Normal? Institutionalizing Ethics in the Age of Algorithm with Hessie Jones, Carolina Bessega, Ann Cavoukian, and Carol Piovesan.

Trust as a Value Creator: The Georgian Impact Model with Jason Brenier of Georgian Partners
Trust as a Value Creator: The Georgian Impact Model with Jason Brenier of Georgian Partners

Elevate Main Stage, Co-founder and CEO Razor Suleman announced the festival’s 2019 theme, Moonshots, following the 50th anniversary of the moon landing. Next year’s festival will welcome acclaimed Canadian astronaut and bestselling author Chris Hadfield as a keynote speaker on the Main Stage. Chris and Helene Hadfield will serve as 2019 Co-chairs of the Elevate Founders Board. “We couldn’t think of anyone better than Chris Hadfield to help us explore far-reaching ideas and the future of tech and innovation at Elevate,” said Suleman.

 

Elevate: Moonshots will run from September 23-27, 2019.

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